Quintiles seeks $2.4B in debt, eyes deals

Quintiles, looking to take advantage of more favorable terms from banks, is seeking to refinance $1.7 billion in debt and bolster its capital in the process.

The company wants to sell about $2.4 billion in debt. The company would use $1.695 billion to retire an existing debt with higher rates and use the remaining money for acquisitions, partnerships, dividend payouts and share repurchases

The new financing, if completed, would not change the ownership structure of Quintiles, said company spokesman Phil Bridges. Private equity players TPG Capital and Bain Capital bought One Equity Partners’ majority stake in Quintiles for more than $3 billion in 2008. Among the other investors in Quintiles are company founder and Chairman Dennis Gillings and companies 3i, Aisling Capital and Temasek Holdings of Singapore.

In addition to refinancing existing debt, the new credit facilities would provide Quintiles with $700 million in fresh capital that the company envisions using for corporate purposes including acquisitions and strategic alliances.

Strategic alliances refer to partnerships with other companies – one of Quintiles’ preferred methods of doing business.

While the Durham company is best known for being the world’s largest provider of clinical trials services, Quintiles also enters into a variety of partnerships with pharmaceutical and other companies in various areas of drug development and sales. For example, Quintiles will provide sales teams for drug makers looking to move product. Another example is the $300 million biopharmaceutical joint venture with Korean conglomerate Samsung announced last month.

Bridges could not identify specific acquisition or partnership targets but confirmed that Asia remains a focus for Quintiles, which has 1,500 employees in the Triangle and more than 20,000 worldwide.

“Asia is definitely a continued focus,” Bridges said. “It is a growing area in terms of population, spend on health care and the clinical trials market.”

Speculation has been rife about Quintiles executing an initial public offering in the near future as the company’s private equity owners seek a return on investment. The fresh capital provided by the debt refinancing would seem to address some of those concerns and possibly push back an IPO.